scholarly journals The Unintended Consequences of Property Tax Relief: New York’s STAR Program

2014 ◽  
Vol 9 (4) ◽  
pp. 446-480 ◽  
Author(s):  
Tae Ho Eom ◽  
William Duncombe ◽  
Phuong Nguyen-Hoang ◽  
John Yinger
Keyword(s):  
New York ◽  
Student Performance ◽  
New York State ◽  
Property Tax ◽  
Education Finance ◽  
Unintended Consequences ◽  
Property Taxes ◽  
Tax Rate ◽  
Tax Relief ◽  
Business Property

New York’s School Tax Relief Program, STAR, provides state-funded property tax relief for homeowners. Like a matching grant, STAR changes the price of education, thereby altering the incentives of voters and school officials and leading to unintended consequences. Using data for New York State school districts before and after STAR was implemented, we find that STAR increased student performance, school district inefficiency, and school spending by 2 to 4 percent in most districts, leading to an average school property tax rate increase of 14 percent. The STAR-induced tax rate increases offset about one third of the initial STAR tax savings and boosted property taxes for business property. STAR did little to offset the existing inequities in New York State’s education finance system, particularly compared to an equal-cost increase in state aid. This article should be of interest to policy makers involved in property taxes or other aspects of education finance.

scholarly journals Leviathan or Public Steward? Evidence on Local Government Taxing Behavior from New York State

2018 ◽  
Vol 49 (4) ◽  
pp. 671-693 ◽  
Author(s):  
Austin M Aldag ◽  
Mildred E Warner ◽  
Yunji Kim
Keyword(s):  
New York ◽  
Local Governments ◽  
Fiscal Federalism ◽  
New York State ◽  
Property Tax ◽  
General Purpose ◽  
Fiscal Stress ◽  
York State ◽  
Expenditure Limitations ◽  
Logistic Regressions

Abstract Fiscal federalism argues local governments compete to provide optimal tax-service bundles as responsible public stewards. In contrast, Leviathan theories argue tax and expenditure limitations (TELs) are necessary to make local governments fiscally responsible. We analyze local taxing behavior in New York State, which implemented a levy limit in 2012 that allows legislative overrides with 60 percent vote of the local governing board. Our 2017 survey of all general-purpose local governments measured fiscal stress, service responses, and local political attitudes and found 38 percent of municipalities voted to override. Logistic regressions show local governments that have more fiscal stress, weaker property tax bases, higher need, and higher employee benefit costs are more likely to override. These findings support fiscal federalism, as local governments that override are pushing back against state policy in order to respond to local needs. TELs introduce unnecessary rigidity and run counter to the precepts of fiscal federalism.

How Does a Reduction in Mandated Medicaid Spending Affect Local Fiscal Behaviors? Evidence from New York State

2021 ◽  
Vol 49 (4) ◽  
pp. 495-547
Author(s):  
Yusun Kim
Keyword(s):  
New York ◽  
Local Governments ◽  
Social Insurance ◽  
New York State ◽  
Property Tax ◽  
Effective Property ◽  
Medicaid Spending ◽  
State And Local ◽  
Sudden Decrease ◽  
The Impact

In 2005, New York (NY) state capped the growth of county-level Medicaid spending, which abruptly decreased counties’ Medicaid outlay in both relative and absolute terms. This study exploits this discontinuity in county Medicaid outlay to estimate the impact of the relief mandate policy on county budgets and property tax levies. It bridges a gap in the public finance literature by addressing local government responses to a sudden decrease in the outlay of a large mandatory spending category. We find a compositional change but no income effect on non-Medicaid spending. However, the policy reduced the effective property tax rate significantly by 6.6 to 8.1 percent on average among affected NY counties after the enactment of the policy relative to control counties. This study advances our understanding of local fiscal responses to an intergovernmental fiscal policy that changes how state and local governments share the costs of a large public social insurance program.

scholarly journals Moving Beyond the Influence of Neighbors on Policy Diffusion: Local Influences on Decisions to Conduct Property Tax Reassessment in New York

2017 ◽  
Vol 47 (5) ◽  
pp. 599-614 ◽  
Author(s):  
Tae Ho Eom ◽  
Hyunhoe Bae ◽  
Soojin Kim
Keyword(s):  
New York ◽  
Policy Diffusion ◽  
New York State ◽  
Property Tax ◽  
Institutional Arrangements ◽  
Local Policy ◽  
Municipal Governments ◽  
Adoption And Diffusion ◽  
Positive Inducements ◽  
Using Data

Over the past few decades, research on policy adoption and diffusion has grown rapidly. Despite the relatively large number of publications, however, little attention has been paid to the important question of why a policy is differently implemented or diffused across governments. To answer this question and improve our understanding of local policy choice beyond widely cited neighboring influences, we closely examine the roles of three main policy actors—internal actors, external actors, and go-betweens—in the local policy diffusion process, drawing particularly upon property tax reassessment scenarios. In addition, we focus on nested institutional arrangements, including form of government and type of property tax assessor, that affect the policy decisions of internal actors. Using data on cities and towns in New York State for 1993-2010, we estimate event history models of property tax reassessment activities. Our findings reveal that regional interactions with neighbors that have already adopted the policy and top-down go-betweens through positive inducements can help facilitate property tax reassessment across municipalities. Reformed municipal governments in the council-manager form, along with appointed assessors, are also most likely to adopt reassessment policy frequently, compared with other institutional arrangements. Overall, this study advances the policy diffusion literature by exploring the roles of different influences through a more detailed, broader approach.

scholarly journals Forgotten equity: The promise and subsequent dismantling of education finance reform in New York State

2019 ◽  
Vol 27 ◽  
pp. 143
Author(s):  
Drew Atchison
Keyword(s):  
New York ◽  
New York State ◽  
Education Finance ◽  
High Poverty ◽  
Finance Reform ◽  
York State ◽  
Reform Legislation ◽  
Court Mandated ◽  
Campaign For Fiscal Equity ◽  
The Impact

This study examines the impact of court-ordered finance reform in New York State resulting from Campaign for Fiscal Equity v. State of New York on equity of inputs using synthetic controls. The findings herein indicate court mandated education finance reform in New York had little to no impact on equity of educational inputs despite an overhauled education finance system intending to distribute more state funding based on student need. In the period during and following the Great Recession, the State of New York chose to cut districts’ foundation aid, a form of aid designed to be distributed progressively, halting any improvement in equity. Had funding been distributed to districts according to the foundation formula that was specified by the education finance reform legislation passed in 2007, high poverty districts would have received more funding and disparities in funding across districts with similar characteristics would have been reduced. I also show that other forms of aid, which are regressively distributed, could have been cut instead of foundation aid, allowing for more funding to flow to high poverty districts in a time of fiscal constraint.

HOMEOWNER PROPERTY TAXES, INFLATION AND PROPERTY TAX RELIEF

1981 ◽  
Vol 34 (2) ◽  
pp. 167-184
Author(s):  
STEVEN D. GOLD
Keyword(s):  
Property Tax ◽  
Property Taxes ◽  
Tax Relief
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